The Statement of Work (SOW) can be one of the best and worst weapons in a project manager’s toolkit. When you get it right, it can save you from a world of trouble, but it takes time to create, and even a minor mistake can have massive repercussions.
In this article, we’re going to discuss some SOW basics and elements of an effective SOW, along with highlighting some relevant SOW documents.
In project management, an SOW is an agreement between an agency, vendor/contractor, and the client. It contains a section called the Scope of Work which mentions the project scope, deliverables, tasks, timeline, payments, project objectives, expected outcomes, terms & conditions, and project requirements. An SOW is needed when a project involves contributors and vendors along with the internal project team. As a project manager, you should use an SOW as part of a contract, ensuring that expectations are agreed-upon and clear. Further, your SOW must be clear to stakeholders in terms of metrics for success.
Purpose of a Statement of Work:
An SOW is used to keep everyone involved with the project in the loop by informing them about project details. Note that an SOW should only be written after guidelines and terms are decided and should have the correct format, crystal clear language, and present specific details like deliverables, tasks, duties, to name a few. This ensures that conflicts are avoided while negotiating the contract. SOW is typically used when a project can be described based on specific instructions and conditions and requirements are understood by both parties. A functional SOW must contain information on metrics and standards along with performance outcomes.
Importance of the Statement of Work:
An SOW provides an additional layer of detail that’s not usually included in project plans, so it does not mention what is to be delivered and what is not.
Such a level of detail provides reassurance to the customer as to what to expect, ensuring a shared understanding of what the project will achieve and deliver. Further, this document also determines what’s “in the scope” and what’s “out of scope”. This is essential because the statement of work acts as the reference point for identifying major elements of the project such as project cost, scope, deliverables, to name a few. If you can create an effective statement of work (SOW), it will save you a world of pain later.
What Should an Effective SOW Contain?
According to project management experts, most SOWs share some vital components, regardless of the industry. As a project manager, you should ensure that the SOW meets expectations. An effective SOW should include:
- Overview of the project; the purpose of the project, i.e., what it will achieve, problem statement.
- Work Breakdown Structure (WBS); approach that is taken for the project, i.e., how it will be completed, specific phases and tasks that need to be completed, milestones to track and measure.
- Deliverables; what is to be produced, i.e., what is needed at the end of the project. For instance, it may be a PSD file of website mockup or a usable code on a server, among other things.
- Period of performance; when will the project be delivered, timeline, and list of milestones. Moreover, it will also include approximate time for each milestone, start dates, end dates.
- Payment information; project cost, payment schedule, and how will you pay your project team.
- Assumptions; what is and isn’t included in the project
- Work requirements; any special project specifics that are to be completed such as certain tools and approaches, along with functional requirements.
Note that creating a statement of work is not an easy task. This is because if the SOW is too broad, vague, or generic, it will leave room for various interpretations that’ll lead to problems down the road. On the flip side, a highly-detailed SOW can constrain the project and negatively affect the project deadlines.
An effective SOW must steer clear of the most common project management traps like confusion, miscommunication, and disputes on the scope. Additionally, it should avoid misinterpretations of needs. It may seem like a lot, but if you can pull it off, you’re well on your way to delivering a successful project.
Related SOW Documents:
Various project documents may be similar to a statement of work. These documents include Project Charter, Statement of Objectives (SOO), and Performance Work Statement (PWS).
A Project Charter is a high-end document that states the responsibilities, preliminary roles, guidelines, and project objectives. Further, it designates stakeholders, along with project managers, and also authorizes a project to begin. This document is mostly created after the SOW is agreed upon.
A Statement of Objectives or SOO is a government document that outlines high-level objectives and performance outcomes for government procurement. This type of document lays a huge emphasis on the outcomes as opposed to how the work is done.
Lastly, the Performance Work Statement (PWS) is just like the SOO as it mainly focuses on results. Like the SOO, this document also explains high-level outcomes along with performance objectives and measurable results.
Thus, the main difference between the documents mentioned above and the SOW is that the SOW facilitates specific and clear directions about how the work should be done. Contrarily, PWS and SOO just explain the desired outcomes. Furthermore, the Project Charter is also high-end, but it integrates goals and expectations with outcomes. SOO and PWS are preferred by government entities since these documents have more flexibility in terms of how contractors should approach a project.
These tips should help you develop an effective statement of work. Similarly, using the right project management tools can also help you be more efficient, and with ClientBuddha, you can have all of them under one hood. To see the platform in action, start your FREE trial of ClientBuddha today!